Social Entrepreneurship – Meaning, History, Characteristics, and Challenges

Meaning of Social Entrepreneurship

Business is not just a profit-making occupation but a social function that involves some duties and requires ethics. It depends on society for existence, sustenance, and encouragement. Social entrepreneurs carry businesses with innovative solutions to society’s most pressing social problems. They are ambitious and persistent, handling major social issues and proposing new ideas for large-scale transformations. They do not leave social needs to the government or business sectors. They recognize the needs of society and crack the problem by changing the system, spreading the solution, and persuading society to move in different directions.

Social entrepreneurs possess good ideas and visions and are committed to implementing them. They deliver approachable, comprehensible, and moral ideas that engage widespread support to maximize the number of citizens who will stand up, accept their ideas, and implement them. The leading examples of social entrepreneurs are Vinoba Bhave, the founder and leader of the Land Gift movement in India; Dr. Maria Montessori, who developed the Montessori approach to early childhood education in Italy; Florence Nightingale, the founder of modern nursing in the UK; Mohd. Yunus, the founder of the Grameen Bank and father of microcredit, etc.

Definitions of Social Entrepreneurship

According to J. Gregory Dees, “Social entrepreneurship is an attempt to draw upon business techniques and private sector approaches to find solutions to social, cultural, or environmental problems. This concept is applied to a variety of organizations with different sizes, aims, and beliefs.”

According to William Drayton, “Social entrepreneurs are rare men and women who possess the vision, creativity, and extraordinary determination and devote these qualities to introduce new solutions to societal problems.”

According to Ashoka Innovators, “Social entrepreneurs are individuals with innovative solutions to society’s most pressing problems.”

History of Social Entrepreneurship

The terms Social entrepreneurs and Social entrepreneurship were first used in the literature in 1953 by H. Bowen in the book ‘Social Responsibilities of Businessmen’. The term social entrepreneurship was promoted in 1980 by Bill Drayton of Ashoka, which is the global association of the world’s leading social entrepreneurs. From the 1950s to the 1990s, Michael Young was a leading promoter of social entrepreneurship. Daniel Bell of Harvard was described as the world’s most successful social entrepreneur of social enterprises. It is because of his role in creating more than sixty new organizations worldwide, including the school of social entrepreneurs which exists in the UK, Australia, and Canada. It supports individuals to realize their potential and to establish, scale, and sustain social enterprises and social businesses.

Characteristics of Social Entrepreneurship

The characteristics of a social entrepreneur are as follows:

1. He tries to shrug off the constraints of ideology or discipline.
2. He identifies and applies practical solutions to social problems, combining innovation, resourcefulness, and opportunity.
3. He innovates a new product, a new service, or a new approach to a social problem.
4. He focuses on social value creation, and in this process, he may be willing to share his innovations and insights for others to replicate.
5. He jumps in before ensuring they are fully resourced.
6. He will have an unwavering belief in everyone’s innate capacity, often regardless of education, to contribute meaningfully to economic and social development.
7. He shows a dogged determination that pushes him to take risks that others wouldn’t dare to accept.
8. He balances his passion for change with a zeal to measure and monitor its impact.
9. He has a great deal to teach changemakers in other sectors.
10. He possesses vision, creativity, and extraordinary determination to introduce new solutions to societal problems.

Problems or Challenges of Social Entrepreneurship

The problems of social entrepreneurship are detailed below:

• Funding
• Communicating value
• Formulating a strong strategy
• Changes in the mission
• Lack of support
• Other problems

1. Funding: Some social entrepreneurs can generate sufficient income through the sale of socially beneficial goods and services, but many of the entrepreneurs are unsuccessful. Other funding opportunities include corporate investment, donations, and government funding. The investors may hesitate to invest their funds as they perceive the organization as a non-profit enterprise. The donors are distrustful of social enterprise, assuming that it is being run as a profit-making organization. Thus, fundraising is a crucial problem for social entrepreneurs.
2. Communicating value: Social enterprises deliver more than commercial value, it is additional social value that often ignites the passion of the social entrepreneur. However social value can’t be measured easily, and it is difficult to communicate the bottom line of investors, donors, or the community at large. It is important to stay objective, to remain convincing, and to make the right decisions in moving the enterprise toward its goals.
3. Formulating a strong strategy: The social entrepreneur finds it difficult to formulate a long-term strategy, define appropriate goals, and sustainably drive growth. The social enterprise has to create multiple social benefits, which implies that it has to set multiple goals, all of which must be evaluated in terms of cost of provision to ensure true value creation. A strong strategy will identify a unique value proposition compared to other organizations and indicate clearly what the organization will not do. However, many social entrepreneurs are having difficulty formulating a strong strategy for their business operations.
4. Changes in the mission: Formulating a good strategy for the social enterprise will help to mitigate the possibility of mission creep. The frequent changes in mission may lead to apprehension in the minds of investors, donors, or the community at large. A successful social enterprise will continuously review its strategy and work to improve it, but changes in the mission can cause confusion and dilute the organization’s impact.
5. Lack of support: Social entrepreneurship is successful only when the social sector gets community support in return. This can be achieved when the community and its leaders have a clear understanding of the sector and find ways to support policy changes to enable social enterprises to flourish with the required amount of funds. But unfortunately, this sector is not getting much recognition, and people have wrong notions about its activities.
6. Other problems: The other problems faced by social entrepreneurs are conveying the business idea, finding time and government approval, maintaining the quality of products and services, sustaining employees, competing with others, promoting awareness of proposed activities, and acquiring technologies to update in related areas.

Thus, we find many new areas in the field of entrepreneurship. The important dimensions of entrepreneurship are intrapreneurship, technopreneurship, cultural entrepreneurship, international entrepreneurship, netpreneurship, ecopreneurship, social entrepreneurship, etc. Entrepreneurship in these areas resulted in new industries and new combinations of currently existing inputs.